JAMES L. ROBART, District Judge.
On April 7, 2016, the court consolidated the above-entitled cases for purposes of conducting discovery and claim construction only. (See 4/7/16 Min. Entry (Dkt. # 24); see also Joint Mem. re: Consolidation (Dkt. # 23).) Following the close of discovery, the court will reassign each of the above-entitled cases back to the originally assigned judge for purposes of deciding any dispositive motions and conducting trial, if necessary. (See 4/7/16 Min. Entry.)
Presently before the court are three Federal Rule of Civil Procedure 12(b)(3) motions to dismiss or transfer for improper venue submitted by: (1) Defendant Arkon Resources, Inc. ("Arkon") (Arkon Mot. (Dkt. # 107)); (2) Defendant High Gear Specialties Inc. ("High Gear") (High Gear Mot. (Dkt. # 109)); and (3) Defendant Wireless Accessory Solutions, LLC, d/b/a iBolt — Wireless Accessory Solutions, LLC's ("iBolt") (iBolt Mot. (Dkt. # 111)). All three motions are based on a recent Supreme Court decision, TC Heartland LLC v. Kraft Foods Group Brands LLC, ___ U.S. ___, 137 S.Ct. 1514 (2017), which the Federal Circuit Court of Appeals held in In re Micron Technology, Inc., 875 F.3d 1091, 1098-100 (Fed. Cir. 2017), represents an intervening change in controlling law for venue in patent cases. (See Arkon Mot. at 4, 6-7; High Gear Mot. at 4, 6-7; iBolt Mot. at 6-7.) The court has reviewed the three motions, all submissions filed in support of and in opposition to the motions, the relevant portions of the record, and the applicable law. Being fully advised,
Arkon is a California limited liability company with its principal place of business in Arcadia, California. (1st Bassard Decl. (Dkt. # 108) ¶ 3.) Arkon has no property, infrastructure, inventory, or other physical presence in the Western District of Washington. (Id. ¶ 4.) Arkon also has no employees in the Western District of Washington and provides no localized customer support or targeted marketing efforts here, nor does it otherwise interact in a targeted way with existing or potential customers in the Western District of Washington. (Id. ¶¶ 5-6.) Arkon makes no representations that it has any presence in the Western District of Washington. (Id. ¶ 5.) Any records, documents or information relating to the subject matter of this litigation, which are in Arkon's possession, custody, or control are located at Arkon's headquarters in Arcadia, California. (Id. ¶ 7.)
iBolt is a limited liability corporation organized and existing under the laws of the State of Utah. (2d Bassard Decl. (Dkt. # 112) ¶ 3.) iBolt's principal place of business is in Arcadia, California. (Id.) iBolt has no property, infrastructure, inventory, or other physical presence in the Western District of Washington. (Id. ¶ 4.) iBolt also has no employees in the Western District of Washington and provides no localized customer support or targeted marketing efforts here, nor does it otherwise interact in a targeted way with existing or potential customers in the Western District of Washington. (Id. ¶¶ 5-6.) iBolt makes no representations that it has any presence in the Western District of Washington. (Id. ¶ 5.) Any records, documents or information relating to the subject matter of this litigation, which are in iBolt's possession, custody, or control are located at iBolt's headquarters in Arcadia, California. (Id. ¶ 7.)
High Gear is a Florida corporation with its principal place of business in Orlando, Florida. (Lee Decl. (Dkt. # 110) ¶ 3.) High Gear has no property, infrastructure, inventory, or other physical presence in the Western District of Washington. (Id. ¶ 4.) High Gear also has no employees in the Western District of Washington and provides no localized customer support or targeted marketing efforts here, nor does it otherwise interact in a targeted way with existing or potential customers in the Western District of Washington. (Id. ¶¶ 5-6.) High Gear makes no representations that it has any presence in the Western District of Washington. (Id. ¶ 5.) Any records, documents or information relating to the subject matter of this litigation, which are in High Gear's possession, custody, or control are located at High Gear's headquarters in Orland, Florida. (Id. ¶ 7.)
On December 17, 2015, NPI filed complaints against Arkon and High Gear in the Western District of Washington alleging patent infringement. (Compl. (Dkt. # 1); 15-1985
On September 19, 2017, the court held a claims construction hearing (see 9/19/17 Min. Entry (Dkt. # 95)) and subsequently issued a claims construction order for the consolidated cases (CC Order (Dkt. # 96)). Discovery in the cases remains open until May 18, 2018. (Revised Sched. Ord. (Dkt. # 126).)
Following the close of discovery, the court will reassign NPI's complaint against iBolt back to the Honorable Marsha J. Pechman and NPI's complaint against Arkon back to the Honorable Richard A. Jones. These judges will administer the iBolt and Arkon cases, respectively, for the purposes of hearing dispositive motions and conducting the trials.
On November 30, 2017, Defendants filed their present motions to dismiss or transfer based on improper venue. (See Arkon Mot.; High Gear Mot.; iBolt Mot.) NPI opposes the motions. (See Arkon Resp.; iBolt Resp.; High Gear Resp.) The court now considers these motions.
Section 1400(b) of Title 28 addresses venue in patent infringement cases. 28 U.S.C. § 1400(b). Specifically, Section 1400(b) states:
Id. In 1957, the United States Supreme Court held that Section 1400(b) "is the sole and exclusive provision controlling venue in patent infringement actions, and that it is not to be supplemented by the provisions of [the general corporation venue statute,] 28 U.S.C. § 1391(c)." Fourco Glass Co. v. Transmirra Prods. Corp., 353 U.S. 222, 229 (1957). Thus, the Supreme Court concluded that for purposes of 28 U.S.C. § 1400(b), a domestic corporation "resides" only in its state of incorporation. Id. at 226.
In 1988, however, "Congress amended Section 1391(c) to provide that `[f]or purposes of venue under this chapter,' a defendant corporation shall be deemed `to reside in any judicial district in which it is subject to personal jurisdiction at the time the action commenced.'" See Automated Packaging Sys., Inc. v. Free-Flow Packaging Int'l, Inc., No. 5:14-CV-2022, 2018 WL 400326, at *3 n.3 (N.D. Ohio Jan. 12, 2018). Two years later, the Federal Circuit held that the newly added phrase "[f]or purposes of venue under this chapter" was "exact and classic language of incorporation," and therefore Section 1392(c) clearly applied to Section 1400(b)—redefining the meaning of the term "resides" in Section 1400(b). VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574, 1579 (Fed. Cir. 1990), abrogated by TC Heartland, 137 S.Ct. 1514. VE Holding remained controlling Federal Circuit authority with respect to venue in patent cases for more than 27 years. See Automated Packaging Sys., Inc., 2018 WL 400326, at *3 n.3.
In May 2017, the Supreme Court issued its decision in TC Heartland, which affirmed its 1957 decision in Fourco Glass Co., 353 U.S. 222, and rejected the Federal Circuit's 1990 decision in VE Holding, 917 F.2d 1574. TC Heartland, 137 S. Ct. at 1517-21. In other words, TC Heartland reaffirmed the principle that the patent venue statute, 28 U.S.C. § 1400(b), and not the general venue statute, 28 U.S.C. § 1391(c), defines where a domestic corporation "resides" for patent cases. See TC Heartland, 137 S. Ct. at 1521. Thus, following TC Heartland, a "civil action for patent infringement" against a domestic corporation may be brought in (1) the judicial district where the defendant is incorporated or "resides," or (2) where the defendant committed acts of infringement and has a regular established place of business. Id.; see also 28 U.S.C. § 1400(b).
In the wake of TC Heartland, district courts split on whether defendants bringing motions challenging venue based on TC Heartland had waived their right to challenge venue or whether the waiver provisions of Federal Rule of Civil Procedure 12(h) were inapplicable because the venue argument was unavailable prior to TC Heartland based on the long-standing precedent of VE Holding. See Automated Packaging Sys., Inc., 2018 WL 400326, at *3 (citing Maxchief Invs. Ltd. v. Plastic Dev. Grp., LLC, No. 3:16-cv-63, 2017 WL 3479504, at *3 (E.D. Tenn. Aug. 14, 2017) (collecting cases from both lines)). On November 15, 2017, the Federal Circuit resolved the split by holding that TC Heartland changed controlling venue law in patent cases because, before TC Heartland, the improper venue defense was not available, making the waiver rules of Federal Rules of Civil Procedure 12(g)(2) and 12(h)(1)(A) inapplicable. In re Micron Tech., Inc., 875 F.3d 1091, 1094 (Fed. Cir. 2017).
In rendering its decision, however, the Federal Circuit left open the possibility that a district court could still rely on its inherent powers and standard procedural devices to find waiver of a venue challenge in order to facilitate "the just, speedy, and inexpensive resolution of disputes." Id. at 1100. The Federal Circuit warned, however, that such authority "must be exercised with caution" and should "rest on sound determinations of untimeliness or consent." Id. at 1101. The Federal Circuit also noted that it had "denied mandamus, finding no clear abuse of discretion, in several cases involving venue objections based on TC Heartland that were presented close to trial." Id. at 1102.
Defendants filed their venue motions shortly after the Federal Circuit's November 15, 2017, decision in In re Micron Technology. (See Arkon Mot.; High Gear Mot.; iBolt Mot.) In response, NPI does not dispute that venue in the Western District of Washington over its patent claims is improper following TC Heartland. (See generally iBolt Resp.; Arkon Resp.; High Gear Resp.) Rather, NPI argues that all three Defendants waived any venue objections by waiting approximately six months following the TC Heartland decision to raise the issue and by continuing to actively litigate NPI's patent claims in the meantime. (See id.) Notably, NPI argues that, during the six-months following TC Heartland, Defendants engaged in the claims construction process, including conducting a Markman
High Gear, Arkon, and iBolt argue that the date from which their venue motions should be judged is the date upon which the Federal Circuit issued its decision in In re Micron Tech., Inc. and not the date upon which the Supreme Court issued its decision in TC Heartland. (See High Gear Reply (Dkt. # 122) at 3-4; Arkon Reply (Dkt. # 123) at 3-4; iBolt Reply (Dkt. # 124) at 3-4.) They maintain that until the Federal Circuit issued its decision "the district courts were split on whether TC Heartland was intervening law," and "[n]ow that the split has been resolved, the case[s] can and should be transferred." (High Gear Reply at 3; Arkon Reply at 3; iBolt Reply at 3.)
The court disagrees. Although a defendant's failure to raise a defense in the trial court does not result in waiver if raising the defense would have been futile, see United States v. Wilbur, 674 F.3d 1160, 1177 (9th Cir. 2012), it is not clear that raising improper venue prior to In re Micron Technology would have been futile. Indeed, courts in this District granted motions to amend answers or transfer for improper venue based on the Supreme Court's decision in TC Heartland prior to the Federal Circuit's decision in In re Micron Technology. See, e.g., Nautilus, Inc. v. ICON Health & Fitness, Inc., No. C16-5393-RBL, 2017 WL 5952375, at *2 (W.D. Wash. Sept. 13, 2017) (granting the defendant's motion to amend its answer to allege improper venue and its motion to transfer based on the intervening change in patent venue law due to the TC Heartland decision); Westech Aerosol Corp. v. 3M Co., No. C17-5067-RBL, 2017 WL 2671297, at *2 (W.D. Wash. June 21, 2017) ("Defendants could not have reasonably anticipated this sea change [in patent venue law due to the TC Heartland decision], and so did not waive the defense of improper venue by omitting it from their initial pleading and motions."). Further, the In re Micron Technology court, although finding that TC Heartland was an intervening change in the law, nevertheless remanded the case so the district court could decide whether the defendant had waived improper venue on grounds other than those provided in Rule 12. In re Micron Technology, Inc., 875 F.3d at 1102. Thus, the Federal Circuit necessarily considered the accrual date of any waiver to be the date upon which the Supreme Court decided TC Heartland, and not the date upon which the Federal Circuit decided In re Micron Technology.
Nevertheless, using the date of the TC Heartland decision as the relevant does not change the outcome due to the unique procedural circumstances of the cases at issue. "Prototypical examples" of where the court might conclude that a defendant had waived a venue defense despite the intervening change in the law precipitated by TC Heartland "include where a defendant raises venue for the first time on the eve of trial, or many months (or years) after TC Heartland was handed down, or where dismissal or transfer would unduly prejudice a plaintiff." Boston Sci. Corp. v. Cook Grp. Inc., 269 F.Supp.3d 229, 242 (D. Del. 2017). Although the discovery period is nearing completion, the court has not set a trial date in any of the cases at issue, and the parties have not yet briefed dispositive motions. (See generally Dkt.) Thus, none of the cases at issue is "on the eve of trial." See id. Nevertheless, NPI argues that Defendants filed their motions too many months following the decision in TC Heartland. (See High Gear Resp. at 5-7; iBolt Resp. at 5-7; Arkon Resp. at 5-7.) Indeed, the court agrees that the approximate six-month intervening period between the Supreme Court's TC Heartland decision and the filing of Defendants' venue motions is, at best, on the outer edge of what might be a reasonable period of time for these motions. Nevertheless, the court finds significant that, despite this six-month delay, NPI offers no argument as to why it would be prejudiced by a transfer of venue at this point. (See generally High Gear Resp.; iBolt Resp.; Arkon Resp.) The court sees no reason why the work done so far by the parties will be wasted following transfer.
At most, NPI offers an argument concerning judicial inefficiencies if the court were to transfer the cases to other districts. (See High Gear Resp. at 7-9; iBolt Resp. at 7-9; Arkon Resp. at 7-9.) Specifically, NPI argues that there are three other cases before the Western District of Washington involving the patent-at-issue and maintaining the action in this court will allow "a single court to consistently resolve several common issues." (High Gear Resp. at 8; Arkon Resp. at 8; iBolt Resp. at 8.) The court might agree if it were deciding all of the dispositive motions and conducting all of the trials in the three cases at issue, but that is not the circumstance here. As noted above, even if the three cases at issue remain in the Western District of Washington, two of the cases will be transferred to other judges for the purposes of hearing dispositive motions and conducting the trials. (See 4/7/26 Min. Entry.) Thus, three different judges will administer all three cases following the close of discovery on May 18, 2018—irrespective of whether the cases remain in this District or are transferred elsewhere. Under these unique circumstances, the court concludes that there is little, if any, prejudice to NPI in transferring the cases to the appropriate judicial districts in which there would be proper venue over NPI's patent claims. Under the unique circumstances of these cases, therefore, the court concludes that Defendants have not waived the defense of improper venue based on the intervening change in the law created by TC Heartland. Accordingly, the court grants Defendants' motions.
In its responses, NPI argues that if the court grants Defendants' venue motions, transfer rather than dismissal is the appropriate remedy. (iBolt Resp. at 10-11; Arkon Resp. at 9-10; High Gear Resp. at 9-10.) Section 1406(a) expressly provides for transfer "to any district or division in which [the case] could have been brought," rather than dismissal, if transfer is "in the interest of justice." 28 U.S.C. § 1406(a). Here, Defendants do not oppose transfer. Indeed, each has stated that it is "amenable" to transfer. (Arkon Reply at 6; High Gear Reply at 5; iBolt Reply at 6.) Given that all three cases have been pending for more than two years, the court agrees that transfer is the appropriate remedy. See Caba v. Frankel, No. 06-cv-4754, 2007 WL 1017649, at *2 (E.D.N.Y. Mar. 29, 2007) ("No purpose would be served by dismissing this action . . . only to have plaintiffs refile the very same action in the District of New Jersey."); Warrington v. Gibson, No. 4:94-cv-119, 1995 WL 1945557, at *6 (N.D. Miss. June 8, 1995) (transferring, rather than dismissing, so that the parties may "continue this litigation from where it stands"). Thus, the court must determine the appropriate judicial district for transfer.
Section 1406(a) requires the court to transfer each of NPI's patent claims to a judicial district "in which it could have been brought." 28 U.S.C. § 1406(a). The court addresses the appropriate judicial district for transfer with respect to NPI's claims against Arkon and High Gear first, and then subsequently addresses transfer of NPI's patent claim against iBolt. Arkon states that transfer of NPI's patent claim to and venue in the Central District of California is proper because Arkon is incorporated in California. (Arkon Reply at 6.) High Gear also states that transfer to and venue in the Middle District of Florida is proper because Arkon is incorporated in Florida. (High Gear Reply at 5.) NPI does not dispute that venue of its patent claims against these Defendants would be appropriate in these respective districts. Based on the Supreme Court's recent ruling in TC Heartland that venue of patent claims is proper where the defendant is incorporated, 353 S. Ct. at 1521, the court agrees. Thus, based on the foregoing analysis, the court grants Arkon's and High Gear's motions to transfer NPI's patent claims based on improper venue. Further, the court will transfer NPI's patent case against Arkon to the Central District of California and NPI's patent case against High Gear to the Middle District of Florida.
iBolt states that transfer to and venue in the Central District of California is proper because it is iBolt's principal place of business. (iBolt Mot. at 7 ("Because [iBolt] resides in Los Angeles County, . . . under 28 U.S.C. § 1400(b), this action could have been brought in the Central District of California."); iBolt Reply at 6 ("[iBolt] has it principal place of business in the Central Distirct of California. Thus, venue would be proper in the Central District of California.").) Under TC Heartland, venue is proper in a patent action either where the defendant is incorporated or where the defendant committed acts of infringement and has a regular established place of business. 353 S. Ct. at 1521; see also 28 U.S.C. § 1400(b). NPI does not dispute that venue would be proper in the Central District of California (see generally iBolt Resp.), and it seems highly unlikely that iBolt committed no acts of alleged patent infringement at its principal place of business (see generally iBolt FAC (Dkt. # 47)). Accordingly, the court concludes that venue is proper in the Central District of California for NPI's patent claims against iBolt based on TC Heartland and 28 U.S.C. § 1400(b).
NPI, however, argues that the court should not transfer the iBolt case because it involves six other causes of action for which iBolt has not challenged venue.
Finally, because venue in the patent infringement claim in the iBolt case is improper in this District, the court must decide whether NPI's other claims against iBolt should be transferred to the Central District of California as well. NPI admits that "many of the same products implicated under NPI's [n]on-[p]atent [c]ounts are also accused of infringing the asserted patent." (iBolt Resp. at 10 (citing iBolt FAC ¶¶ 21, 30).) Thus, "[i]t would seem absurd for this court to sever the patent infringement claim and transfer it . . . while retaining the [other] counts." Lighting Sys. v. Int'l Merch. Assoc., Inc., 464 F.Supp. 601, 606 (W.D. Pa. 1979). For the court "to retain the [other] counts while the patent infringement action is being tried in [a different court] would be intolerable judicial inefficiency leading to possible inconsistent results on the same set of facts." Id. Such an analysis, however, is governed by 28 U.S.C. § 1404(a), which provides, in pertinent part, that "[f]or the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought." 28 U.S.C. § 1404(a). A court may sua sponte transfer venue pursuant to section 1404(a), "so long as the parties are first given the opportunity to present their views on the issue."
Based on the foregoing analysis, the court GRANTS Arkon's and High Gear's Rule 12 venue motions (Dkt. ## 107, 109) and transfers NPI's patent case against Arkon to the Central District of California and NPI's patent case against High Gear to the Middle District of Florida. The court also GRANTS iBolt's Rule 12 venue motion (Dkt. # 111) but defers transferring NPI's patent claim against iBolt to the Central District of California until the court receives iBolt's and NPI's responses to the court's order to show cause why the court should not transfer NPI's non-patent claims along with the patent claim pursuant to 28 U.S.C. § 1404(a), as described herein.
In order to assist the Clerk in administering the transfer of NPI's cases against Arkon and High Gear, the court DIRECTS the Clerk to file copies of this order in docket numbers C15-1984JLR, C15-1985JLR, and C15-2024JLR. The court ORDERS iBolt to file its response to the court's order to show cause in docket number C15-2024JLR. Further, the court ORDERS the parties in NPI's two remaining cases against iBolt and Bracketron, Inc. ("Bracketron") to file any further submissions under each case's original filing number. Specifically, the parties in the iBolt matter should file any new submissions under docket number C15-2024JLR and the parties in the Bracketron matter should file any new submissions under docket number C16-0109JLR.
(3) Washington common law trade dress infringement; (4) unfair business practices under RCW ch. 19.86; (5) Washington common law unfair competition; and (6) Washington common law unjust enrichment. (15-2024 Compl. ¶¶ 27-60; iBolt FAC ¶¶ 29-62.)